Evolv Technologies agreed to corporate governance reforms that will take effect within 30 days of the settlement’s effective date and remain in place for five years.
The settlement resolves three derivative matters in Massachusetts and Delaware, plus a litigation demand by stockholder Nicholas R. Ingrao. The company said the reforms were prompted by claims tied to past marketing practices and revenue-recognition issues that surfaced in 2023 and 2024.
The notice says Evolv disclosed on Oct. 12, 2023, that the FTC had requested information about “certain aspects” of its marketing practices. On Feb. 19, 2024, the company said the SEC had opened a “non-public, fact finding inquiry” into similar issues.
On Oct. 25, 2024, Evolv said it had determined that accounting for certain sales transactions was inaccurate and that revenue had been prematurely or incorrectly recognized in financial statements for periods from the second quarter of 2022 through the second quarter of 2024. The company said certain financial statements should not be relied upon and that a board committee was investigating.
The company later reached a settlement with the FTC on Nov. 26, 2024. Under the court-approved order entered Dec. 6, 2024, Evolv agreed to stop using certain prior marketing claims without adequate substantiation and to give eligible school customers a 60-day contract cancellation period.
The derivative settlement followed a series of legal actions: Nov. 12, 2024: the Maas action was filed in Massachusetts. Nov. 27, 2024: the Johnson action was filed. Jan. 6, 2025: the Massachusetts actions were consolidated. Mar. 11, 2025: the Bersch action was filed in Delaware. Oct. 2, 2025: the Patrick action was filed in Delaware. Jan. 6, 2026: Ingrao sent a pre-suit demand to the board. Feb. 18, 2026: the first mediation session was held. Mar. 25, 2026: a second mediation session was held. Apr. 22, 2026: the parties executed a term sheet. Aug. 5, 2026: the settlement was dated. * Oct. 21, 2026: the court is scheduled to hold the settlement hearing.
The settlement terms include audit committee charter changes requiring periodic private sessions with management, the internal auditor and the independent auditor. The notice also says the reforms will be maintained for five years. As a result of these announcements, the company's shares have moved -2.12% on the market, and are now trading at a price of $6.0001. For more information, read the company's full 8-K submission here.
